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“Happiness data” may help assess the welfare
effects of a new labor market policy, like a change in benefit
generosity

Imagine a government confronted with a
controversial policy question, like whether it should cut the level of
unemployment benefits. Will social welfare rise as a result? Will some
groups be winners and other groups be losers? Will the welfare gap between
the employed and unemployed increase? “Happiness data” offer a new way to
make these kinds of evaluations. These data allow us to track the well-being
of the whole population, and also sub-groups like the employed and
unemployed people, and correlate the results with relevant policy
changes.